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Service Tax - Case Laws
Showing 41 to 60 of 144 Records
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2014 (6) TMI 690 - CESTAT CHENNAI
Waiver of pre deposit - Manpower Supply Service - Payment of labour charges to farmers - organizing labourers making it available to the farmer for harvesting sugar cane - Held that:- In the absence of employer-employee relationship between the applicant and the labourers, prima facie, it appears that payment to the labourers is only routed through applicant and applicant is not receiving any consideration for services, if any, rendered. For levying service tax, it is necessary that services should be rendered and there should be consideration received for such services. Since adequate proof regarding consideration retained by the applicant is not brought on record, we consider it proper to grant waiver of pre-deposit of dues arising from the impugned order for admission of appeal following the earlier order given by this Tribunal. We also note that the order passed by the Bombay Bench of the Tribunal in the case of Samarth Sevabhavi Trust (2011 (4) TMI 918 - CESTAT, MUMBAI) was in a different set of facts.
We note that applicant therein was not a sugar factory. The applicant therein was engaged in the business of organizing labourers making it available to the farmer for harvesting sugar cane and also in transportation of sugarcane to the sugar factory and they were receiving consideration for the services. Therefore, we feel that the order passed in that case is not applicable in the facts of the present case. - Stay granted.
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2014 (6) TMI 660 - CESTAT NEW DELHI
Admissibility of refund claim - period of limitation - Notification No. 41/2007-ST dated 6.10.2007 - As per para 2(e) of ibid notification the claim for refund was required to be filed on a quarterly basis within 180 days from the end of the relevant quarter during which the said goods had been exported. - Held that:- Commissioner (Appeals) has examined the matter in depth. He has rightly distinguished the applicability of section 11B and applicability of notification No.41/2007-ST. Concept that exemption notification has to be strictly construed has been appreciated. - no reason to interfere in the findings - Decided against assessee.
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2014 (6) TMI 659 - CESTAT NEW DELHI
Demand of Service Tax - Business auxiliary services - to approach, discuss, inform, market and sell to various persons various vehicle finance schemes - whether in the nature of provision of Service on behalf of clients or promotion and marketing activities - exemption under Notifications Nos. 14/2004-ST & 25/2004-ST - penalties under Sec 76,77 and 78 - Held that:- Appellants service are not covered under the scope of ‘provision of services on behalf of the clients’, the benefit of the said exemption Notifications is not available to them..
Agreement between M/s. TFL and the Appellants is so clearly worded regardings the activities to be carried out by the Appellants that it leaves no scope for any ambiguity whatsoever, leave alone the ambiguity even remotely amenable to the interpretation that their services did not fall under the category of promotion and marketing and/or that they were providing services to the potential loan seekers on behalf of Ms. TFL and not to M/s. TFL.
Levy of penalty - Held that:- Obviously, the Appellants deliberately chose not to pay Service Tax and then sought to justify their action by trying to put fourth an interpretation which is so grossly untenable and devoid of any basis that no reasonable person even with the fullest sympathy with the Appellants would buy their contention. They did not even take Service Tax registration and so obviously also did not file any Service Tax returns. In these circumstances their plea that it was a matter of interpretation is totally untenable. Consequently, there is no infirmity with regard to the Appellants liability to penalty which is patently leviable on them - Decided against assessee.
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2014 (6) TMI 658 - CESTAT BANGALORE
CENVAT credit - export of services - credit has been denied on the ground that original authority thought that the output services were not at all taxable and therefore input service credits could not have been taken at all - Held that:- the detailed submissions made in respect of different services rendered by the respondents/assessee have not been discussed in detail at all. Even where there has been discussion, the discussions are not sufficient and mostly general in nature. - matter remanded back for reconsideration.
Classification of output services - According to Revenue output service was classifiable under ‘Information Technology Service’ (ITS) whereas it is claimed by the respondents that such services are classifiable under ‘Business Support Service’ (BSS) or ‘Business Auxiliary Service’ (BAS). - Held that:- Since the refund claims had been rejected on the ground that output services were a non-taxable service and the eligibility for the credit had not been examined, this aspect also will have to be considered in detail by the original adjudicating authority.
It was also requested by both the sides that some general guidelines should be laid down by this Tribunal while remanding the matter.
Scope of business auxiliary services - scope of the term 'include' - Held that:- the word ‘includes’ has not been used to expand the definition of ‘support service of business or commerce’. This is because the meaning itself is very broad and therefore it may not be correct to say that the word ‘includes’ as in the normal cases expands the definition here. If the meaning given for ‘support service of business or commerce’ is taken as very broad and if there was no intention to restrict the same, it would have been sufficient to say that ‘support service of business or commerce’ means services provided in relation to business or commerce.
While coming to the conclusion we take note of the fact that on 8.4.2011 the operational processes for marketing was added by Finance Act, 2011 and if the meaning was to cover almost all services, there was no need to add to the definition subsequently. In fact, the explanation given below in the definition explaining what is infrastructural support service would also support the view that in all types of services provided in relation to business or commerce can be considered as ‘support service of business or commerce’ may not be correct. - it would be necessary for the original adjudicating authority to consider each service rendered by the assessees herein as to whether they fall under ITS or BAS or BSS or any other service which appellant may choose to make a claim at the time of fresh adjudication. - matter remanded baci - Decided partly in favour of Revenue.
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2014 (6) TMI 657 - CESTAT BANGALORE
Denial of refund claim - service tax paid GTA services - consignment note was not issued by the Goods Transport agency - after coming to know that they were not liable to pay they filed a refund claim - Held that:- definition of consignment note in Rule 4B appears to have been provided to ensure that the recipient of the services who is required to pay Service Tax in accordance with Notification No. 35/2004-S.T. in the capacity of recipient can take the Cenvat credit was if all the details which are required as per Cenvat Credit Rules, 2004 are available and is not denied the benefit of credit on the ground that a proper consignment note has not been issued.
The question that arises is just because private truck operator or a GTA violates the provisions of Rule 4B by not issuing a consignment note can the recipient refuse to pay Service Tax. According to the law, recipient of the services has been made liable to pay and there is no dispute on this issue. According to Notification No. 35/2004-S.T., person who pays the freight is liable to pay. Therefore just because a person has not issued consignment note in accordance with law and violated the provisions of law, it cannot be held that the recipient also can claim that he would also violate the law. Therefore, on analysis of the statutory provisions and Notification, etc., the recipient is liable to pay Service Tax in situation like this and therefore the refund claim has correctly been rejected. - Decided against the assessee.
Rejection of refund claim of the ground of no challenge to assessment order - Held that:- When the Revenue contends that the appellant/assessee should have challenged the assessment before filing refund claim, it is expecting the impossible since how can a person challenge his own assessment. Moreover, this leads to the question as to before whom assessment should be challenged. In this case, assessment is by the assessee and this has to be treated as the Order-in-Original but there is no appellate authority prescribed in the statute. Therefore this is not a correct proposition of law. - the view taken by the Revenue that refund claim can be rejected on the ground that the refund claim has been made without challenging the assessment order cannot be sustained.
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2014 (6) TMI 656 - CESTAT BANGALORE
Waiver of pre deposit - Demand of limitation - Bar of limitation - Held that:- The appellant furnished the required particulars through a letter dt. 08/08/2006 wherein they, inter alia, offered to supply copies of the relevant agreements, which were submitted on 17/11/2006. It thus appears that all the relevant documents and information were furnished by the appellant to the Department during July to November 2006. However, the show-cause notice came to be issued as late as in April 2010. It is also on record that, consistent with the stand taken by the appellant in their correspondence with the Department, they took registration under BAS and other services and started paying service tax accordingly on the activities covered by the very same agreements. Prima facie, the appellant cannot be said to have suppressed material facts with intent to evade payment of service tax - stay granted.
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2014 (6) TMI 655 - CESTAT MUMBAI
Import of service - Reverse charge - Leased Circuit / Telecommunication service received from Singapore - telegraph authority - clarification issued by the Board vide letter dated 15-7-2011 - Held that:- The clarification given by the Board squarely deals with the situation in the case before us. As per the said clarification, no Service Tax is payable under Section 66A if leased circuit service is received from a foreign vendor. The argument of the department that this clarification is only an internal correspondence and not a circular and hence not binding on the department is childish, to say the least.
Only leased circuit services rendered by a telegraph authority is taxable and since the foreign vendor is not such an authority, the question of levy of Service Tax from the recipient of the service under reverse charge basis does not arise. - Decided in favour of assessee.
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2014 (6) TMI 628 - CESTAT NEW DELHI
Demand of service tax - Goods Transport Agency - availing cenvat credit while availing exemption under notification no.1/06-ST dated 1.3.2006 (S.No.6) - as soon as this irregularity was pointed out to them, they reversed the same along with interest. The point of dispute is that as to whether the subsequent reversal of the cenvat credit would amount to non availment of credit - Held that:- for availment of 75% abatement in the notification no.1/06-ST which came into force w.e.f. 1.2.2006 the conditions of non-availment of cenvat credit in respect of input service has been added. - Apex Court has held that, when the benefit of an exemption is subject to the condition of non-availment of cenvat credit and initially, the assessee has taken the cenvat credit but subsequently, before the clearance of the exempted goods or after the clearance of the exemption goods the credit taken was reversed, it would amount to not taking the cenvat credit and the benefit of exempted notification cannot be denied - Following decision of Chandrapur Magnet Wires (P) Ltd. (1995 (12) TMI 72 - SUPREME COURT OF INDIA) and the judgement of the Hon’ble Allahabad High Court is in the case of Hello Mineral Water Pvt. Ltd. (2004 (7) TMI 98 - HIGH COURT OF JUDICATURE AT ALLAHABAD) - Decided in favour of assessee.
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2014 (6) TMI 627 - CESTAT NEW DELHI
Business Auxiliary Service - extended period of limitation - demand based on ST-3 return - Benefit of Notification No. 14/2004-ST dated 10.9.2004 wrongly availed - Held that:- it is seen that assessee mentioned ‘N.A.’ in the column meant for ‘value of taxable service’ which is understandable as during the said months they did consider the impugned service as exempt i.e. non-taxable. There is no other ground given in the SCN for alleging wilfull mis-statement / suppression of facts. Indeed, the adjudicating authority itself considered the case fit enough for the benefit of Sec 80 of Finance Act 1994.
Thus even the adjudicating authority conceded that there was a reasonable cause for the Respondents failure to pay tax. As is evident from the facts of this case, the reasonable cause for failure was their belief that the impugned service was exempt during the period 10.09.2004 to 15.06.2005 - Thus, it is evident that there is not even an iota of evidence to even suggest that there was any wilfull mis-statement or suppression of facts on the part of the Respondents. Consequently, extended period is not invokable in this case - time limit for raising demand is only one year in the absence of the ingredients required for invoking the extended period of five years, the demand is clearly time barred - Decided against Revenue.
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2014 (6) TMI 626 - CESTAT NEW DELHI (LB)
Demand of service tax - Computer Reservation System (CRS / GDS) - services relating to the reservation of ticket availability position through on line computer system - whether "Online Database Access or retrieval Service" was received by the appellant M/s British Airways during the period from 18/04/2006 to 31/05/2008 from foreign based CRS service provider and liable to service tax in terms of section 66A of the Finance Act, 1994 on reverse charge mechanism basis - Difference of opinion - Majority order - Held that:- M/s British Airways, India has to be treated as a separate person. If that be so, in view of the admitted position that the contract between CRS/GDS companies is not with M/s British Airways, India and is only that M/s British Airways, UK, the present appellant cannot be held to be recipient of the services so as to make him liable to pay service tax, on reverse charge basis, in terms of the provisions of Section 66A.
British Airways, UK having received the services, which stands provided by CRS companies located outside India and the consideration for which stands provided by British Airways UK. The same stands consumed in UK only inasmuch as the Server provided by CRS/GDS companies to IATA agents are connected between the two of them and such services are being utilised by the travel agents.
Service is consumed by the persons receiving the same. The service having been provided by a foreign based company to a foreign based head office there cannot be any liability of the present appellant to discharge its service tax, inasmuch as service tax being a destination and consumption based tax cannot be created against the non-consumer of the services.
It is also not the Revenue's case that British Airways, India has made any payments for the services so procured by British Airways, U.K. In fact on the contrary, it is admitted position that the entire consideration for the services stand paid by British Airways to the CRS/GDS companies. The appellant in the present case is only appointing IATA agents, dealing with them, collecting sale proceeds of the tickets sold by them and remitting the same to the head office. They are not, in fact, even using the said service directly and as such can, by no stretch of imagination held to be service recipient in India so as to pay any service tax.
Extended period of limitation - Revenue neutral exercise - Held that:- Admittedly British Airways India is discharging its service tax liability in respect of air transportation tickets sold by them. The present demand confirmed against them, was admissible to them as Cenvat credit, which could have been further utilised for discharge of their service tax liabilities - demand, having been raised by invoking the longer period of limitation is hit by the provisions of Section 11A of the Act. If non-registration and non-filing of returns is the criteria for rejecting the appellant's plea of bona fide belief and holding against them, the plea of limitation would not be available to any assessee, inasmuch as the service tax liabilities would arise only in those cases where the appellants are not registered and are not filing the returns.
If an assessee entertained a bona fide belief that inasmuch as the service is not being received by him, and he is not required to pay any tax, he cannot be blamed for the same. Further the fact that the entire exercise was Revenue neutral is also one of the factors to be considered in support of the appellant's plea of bona fide belief. If the appellant would have paid the said tax, they would have been entitled to the credit of the same and would have been in a position to use the same in discharge of their admitted service tax liabilities - demand is barred by limitation and is required to be set aside along with setting aside of penalty - decided in favour of assessee.
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2014 (6) TMI 625 - CESTAT MUMBAI
Adjustment of tax paid under protest with service tax liability - Whether the appellant could have adjusted the excess Service Tax demand of Rs. 4,17,73,025/- which has been paid under protest - Held that:- appellant sought clarification from the department and they were advised by the department that they are not liable to pay Service Tax on renting/leasing the premises in the Airport. The appellant adjusted the excess Service Tax paid by them against the tax liability during January - March, 2007. The action taken by them was strictly in accordance with the provisions of said Rule and, therefore, we find that the demand towards such adjustment of credit in the impugned order is not sustainable in law. The only fact that needs to be verified is whether the amount adjusted is the amount of excess tax paid or not. This needs to be verified by the department from the records and the evidence adduced by the appellant in this regard. If, on such verification, it is found that the appellant is not liable to pay any Service Tax, the question of imposition of any penalty also would not arise.
As regards the demand towards excess Cenvat credit availed on the input service during the impugned period, this position has been clarified by the C.B.E. & C. in Circular No. 137/12/2008-CX.4, dated 21-11-2008, wherein the Board has clarified that utilization of accumulated credit on account of 20% cap under Rule 6(3)(c) of the Cenvat Credit Rules, 2004, is permissible from 1-4-2008. Therefore, the assessee is entitled to avail the accumulated credit on account of 20% cap w.e.f. 1-4-2008 or the subsequent period. In case any assessee has utilized the accumulated credit prior to 1-4-2008, they are liable to pay the interest on the excess credit availed and utilized during the period. In view of the above clarification by the Board, the demand of Rs. 1,41,15,163/- is not sustainable in law. What can be recovered from the assessee is only interest on the said amount of excess credit utilized prior to 1-4-2008. - Matter remanded back - Decided in favour of assessee.
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2014 (6) TMI 624 - CESTAT NEW DELHI
Penalty u/s 77 - whether the three letters issued by the department can be held to be served upon the appellant or not - Held that:- The appellants’ contention is that they have not received the said letters whereas the Revenue’s stand is that the same were sent to them through courier - As the disputes relates to the receipts of said letters seeking information, which stands contested by the appellant, by extending the benefit of the appellant I set aside imposition of penalty - Decided in favour of assessee.
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2014 (6) TMI 594 - CESTAT NEW DELHI
Waiver of pre deposit - reverse charge - import of services - web hosting services - maintenance and repair service Held that:- in respect of maintenance and repair service in respect of software to have been received from foreign service providers during period from 09/07/04 to 17/04/06 - since these services had been received during period prior to 18/04/06 when there was no provision in the Finance Act, 1994 for charging service tax in respect of services received by a person in India from an offshore service provider - demand is not sustainable.
As regards supply of software content for use in telecommunication service - held that:- for the period prior to 01/06/07 no service tax could be charged by treating this service as business support service. - demand is not sustainable.
AS regards activity of wireless instant messenger application on MTC’s network - Held that:- there is nothing in the joint venture from which it can be inferred that TASK, Kuwait were providing the service of marketing or promotion of the services of the appellant and, as such, this joint venture agreement cannot be said to be an agreement between the service provider and the service recipient. - demand is not sustainable.
As regards web hosing services - classification - information technology service covered by Section 65 (105) (zzzze) or business support service taxable w.e.f. 01/05/06 under Section 65 (105) (zzzq) - Held that:- On perusal of Section 65 (105) (zzzze), we are prima facie view that the service of Web hosting being received by the appellant from foreign service providers is not covered by clause 65 (105) (zzzze), as this clause covers various services in relation to information technology software including development of information technology software, study, analysis, design and programming of information technology software, acquiring the right to use the information technology software supplied electronically etc. - On the other hand the Web hosting services received by the appellant involved providing of space by a service provider in his server to another person to enable that person to upload information about his business or his company which can be accessed by his customers, friends and other individuals through internet. The Web hosting service is a service which is used by person for marketing of his products and, therefore, in our prima facie view, the same has to be treated as support service of business or commerce. Therefore, in respect of the service tax demand on this service, the appellant do not appear to have prima facie case in their favour. - stay granted partly.
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2014 (6) TMI 593 - CESTAT MUMBAI
Refund claim - Export of services - period of limitation - Rule 5 of the Cenvat Credit Rules, 2004 - Notification No.5/2006 CE(NT) - period fo limitation to be computed from the date of invoice / export or from the date of receipt in convertible foreign exchange - Held that:- Of course, if payment for export of service is to be obtained in rupees or non-convertible foreign exchange, then it will not be treated as export of service. Further, reading of Rule 4 of the Export of Service Rules indicates that any taxable service may be exported without payment of service tax. If rule 3(2) is to be read as export will take place only after receipt of payment in convertible foreign exchange then except in case of advance payment no service can be exported without payment of service tax. Thus a harmonious reading of sub-rule (2) to Rule 3 and Rule 4 would indicate that the services are exported when (i) these are provided from India and used outside India and (ii) payment terms are in convertible foreign exchange. In the present case, the appellants are providing business auxiliary service and management consultancy services. Thus the export of service takes place at the time or issuing invoice. The payment condition is only to ensure that the service provider receives the payment in convertible foreign exchange so as to get the benefit of service tax. The date of receipt of such payment is not relevant for determining the time of export. In view of the above analysis, I hold that the relevant date for determining the period of limitation will be the date of export of services or the date when the invoices are raised.
Regarding various input services on which refund was rejected on the ground of no nexus with the output service, various input services was found as allowable and some of them are not eligible - adjudicating authority to allow the refund as per the order - Decided partly in favour of assessee.
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2014 (6) TMI 592 - CESTAT MUMBAI
Demand of service tax - Business Auxiliary service - Whether the services rendered were classifiable under BAS prior to 16-6-2005 or not - Held that:- Activities undertaken by the appellant for which they were collecting service charges were in respect of cargo imported or exported by their customers and this fact is evident from the nature of service charges collected - services were in relation to procurement of goods or services, which are inputs for the client and such services clearly fell under sub-clause (iv) of section 65 (19) as it stood with effect from 10-9-2004. Even if it is held that these activities did not fall under sub-clause (iv), they would certainly fall under sub-clause (vii) as any service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi). Even if the appellant had acted as a commission agent as claimed by them, they would fall under sub-clause (vii) of clause (19) of section 65 as the entry covered the services rendered as a commission agent.
From the statutory definition of BAS as it stood prior to 10-9-2004, the services rendered by the appellant would not come under any of the activities specified under various sub-clauses, namely, (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; (ii) promotion or marketing of service provided by the client; (iii) any customer care service provided on behalf of the client; or (iv) any incidental or auxiliary support service in respect of (i) to (iii). Therefore, there would not be any liability to pay service tax prior to 10-9-2004 on the appellant.
Extended period of limitation - Held that:- bonafide belief is not blind belief and belief can be said to be bona fide only when it is formed after all reasonable considerations are taken into account. No evidence has been led before us showing that the appellant took all reasonable pre-cautions. - extended period of limitation applicable.
The services rendered by the appellant are liable to service tax under "Business Auxiliary Service" as defined in 65 (19) of the Finance Act, 1994 for the period from 10-9-2004 onwards - The consideration received shall be treated as cum-tax and the service tax liability shall be re-computed for the period from 10-9-2004 onwards - The appellant shall be liable to penalties under sections 76, 77 and 78 of the said Finance Act, on the re-determined service tax liability - For the period from 10-5-2008, penalty under section 78 alone shall apply and not that under section 76 - Decided partly in favour of assessee.
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2014 (6) TMI 591 - CESTAT KOLKATA
Waiver of pre-deposit - classification of services provided by Overseas Logistics Service Providers (OLSPs) to accomplish the overseas part of the clearing and forwarding job - business auxiliary service of not - services for providing the entire clearing and freight forwarding services including collection of cargo from the customer's place, arranging for storage in the foreign land, Customs clearance, booking space with the airline and shipping lines, landing over the cargo to airlines or shipping lines for shipment and informing the Applicant regarding dispatch of cargo. The OLSPs facilitated the business of the Applicant by providing marketing information in a reciprocal manner and by creating condition in the foreign land wherefrom a support in conducting the logistic service by providing their ready infrastructure for catering the needs of client of the Applicant.
Held that:- services provided by the OLSPs to the Applicant were business auxiliary services because the activities of the OLSPs satisfied the categories appended under (vi) and (vii) of the definition of 'Business Auxiliary Service'. We find that OLSPs not only provided service of clearing and forwarding on behalf of the Applicant, but they also undertook incidental or auxiliary services like collection of payment, management or supervision job. We also find that OLSPs provided a number of services to the Applicant till they intimated M/s. TKM Global regarding dispatch of cargo and in doing so, they rendered services on behalf of the Applicant. Thus, they provided the services, incidental or auxiliary, to provide such service. Their activity in relation to the functioning of the Applicant as a clearing and forwarding agent, was surely auxiliary in nature because in absence of their services, the Applicant would not be able to fulfill their responsibility as the clearing and forwarding agent.
Taxability is quite evident from the admission of the Applicant themselves. However, the Applicant made an alternate plea that they are covered under 'Cargo Handling Service' and contested a part of the demand on the ground of limitation of time. A question of limitation of time is a mixed question of fact and law, which will be considered during regular hearing of the Appeal - Applicant are directed to make a predeposit of 25% of the Service Tax amount - stay granted partly.
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2014 (6) TMI 590 - CESTAT KOLKATA
Waiver of pre-deposit - Valuation - inclusion of discount offered to dealers as part of consideration - sale of Recharge Voucher (RCVs) - RCVs are sold at MRP - Penalty u/s 78 - from April, 2008 to March, 2009 - telecommunication service - Held that:- period involved in this case is from April, 2008 to March, 2009 and Section 67 was amended w.e.f. 18/4/2006 and simultaneously service tax (Determination of Value) Rules, 2006.So far as the reliance placed by the applicant on the case laws cited by the applicant is concerned they relate to period prior to the amendment of the provisions of law. Admittedly, the explanation was added to Rule 5 (1) of Service Tax Rule vide which it was clarified that service specified in sub-section (zzzx) of clause 65 of section 105 of the Finance Act, 1994, the value of the taxable service shall be the gross amount paid by the person to whom telecom service is provided by the telegraphic authority" which goes to show that the intention of Registration has always been to levy the tax on the value received from the person to whom the telecom service is provided by the telecom authority.
In this case the service is provided to the consumer and not to the distributor. Hon'ble High Court of Kerala in the case of Vodafone Essar Cellular Limited [2010 (8) TMI 691 - KERALA HIGH COURT] has held that "So much so, there is no sale of any goods involved as claimed by the assessee and the entire charges collected by the assessee at the time of delivery of Sim Cards or Recharge coupons is only for rendering services to ultimate subscribers and the distributor is only the middleman arranging customers or subscribers for the assessee." Once it is established that the charges collected from the customer in lieu of the RCVs is a service charge, not a sell, it is automatically established that the amount deducted by the dealer is nothing but commission which should be included to the taxable income of the noticee". The above case relates to applicability of certain income tax provisions but the decisions support the Department's case.
Prime facie case is against the assessee - directed to make pre-deposit of 25% of duty involved - stay granted partly.
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2014 (6) TMI 557 - CESTAT MUMBAI
Classification under Section 65 (105)(zzzzj) - supply of tangible goods - reverse charge mechanism - vessels were not located in India - The contention of the appellant is that there is no supply of vessels by the ship owners to the appellant - Held that:- The conditions precedent for Notification of reverse charge in respect of Supply of Tangible Goods from foreign service provider, the expression during the period of use appear under Rule 3 (iii) of the Rules has been interpreted by the Tribunal in the case of Petronet LNG (2013 (11) TMI 1011 - CESTAT NEW DELHI) relied upon by the appellant. The Tribunal held that for being tangible goods must be located in India during the entire period of use and it is not so located in India for any part of the period it cannot be said to be located in India and the Service Tax in respect of the same cannot be levied under the reverse charge mechanism.
It is clear from the definition of "India"as extracted above that for the purpose of Import of Service Rules, non-designated area in the Continental Shelf and the Executive Economic Zone of India during the relevant period even after the amendment definition "India" included only the installations, structures and vessels in the Continental Shelf of India and the Exclusive Economic Zone itself. Apart from the above a ship is plying in the Continental Shelf and the Exclusive Economic Zone of India carrying goods or persons cannot be regarded as India for the purpose of Import of Service Rules. Further the expression ‘vessels' is preceded by the words "installation and structures".
Applying the principle of Noscitur A Sociis the vessels covered therein would be such vessels which are akin to installation and structures and which are to be stationed at a fixed location in the Continental Shelf and Exclusive Economic Zone of India while rendering services. In our opinion such vessels may be of the type such as floating or submersible drilling of production platforms, generally designed for the discovery or the exploitation of offshore deposits of oil and natural gas. The vessels in question are offshore supply vessels which are different from function in a fixed or stationary position.
Appellant cannot be held to be under the reverse charge mechanism in respect of vessels not located in India during the entire period of their use. In view of above, we find that the ratio of the decision of the Tribunal in the case of Petronet LNG (2013 (11) TMI 1011 - CESTAT NEW DELHI) is squarely applicable to the facts of the present case - Decided in favour of assessee.
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2014 (6) TMI 556 - CESTAT NEW DELHI
Effective Rate of service tax - enhanced of rate of service tax from 8% to 10.2% - Assessee contends that service was provided prior to enhancement date - Held that:- appropriate rate at which tax is leviable is the date of occurrence of the taxable event and in the case of service tax is the date of rendition of the service. In view of this position in law, the assumption to the contrary by the learned primary and appellate Authorities that the appellant is liable to levy and collection of service tax, at the rate prevalent on the date of receipt of consideration for the taxable service provided, is fundamentally misconceived and unsustainable. Since both the authorities have recorded that there was no material on record to support the appellant s claim as to having provided the taxable service prior to increase in the rate of taxation; and since the learned Counsel of the appellant Shri Batra contends that there is sufficient and credible evidence to establish this claim, we consider it appropriate to remit the matter to the appellate Authority, to ascertain whether the taxable services were provided by the appellant prior to 10/09/04 - Matter remitted back - Decided in favour of assessee.
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2014 (6) TMI 555 - CESTAT AHMEDABAD
Planning advisory and execution services - Revenue held this service as Real Estate Agent, commercial or industrial service and construction of Residential Complex - Demand of CENVAT Credit - Held that:- appellants themselves in their appeal memorandum have stated, as reproduced above, that when the scheme is completed, all the members are taken up as either members or share-holders of the society or NTA and the persons of the builder go out of the NTA or the society. Eventually, the NTA or the society either enter into sale deeds in favour of the members or just allots the land in favour of the members. As reproduced by us above, admittedly the land was purchased in the name of the society and the society allotted the land to the members without a registered sale deed thereby stamp duty was avoided.
Measures taken by the appellants or the public at large to avoid stamp duty or to devise mechanism to legally not to pay stamp duty should not be a ground for demanding Service Tax or upholding the demand for Service Tax. But what the appellants are asking the Revenue to do is to ignore the legal and statutory documents executed for the purpose of construction/development and transfer of property between the Society/NTA and members. It has to be noted that it is the Housing Society/NTA which purchases the land even though the builder pays to the society to facilitate the payment for the land. Similarly even though the builder identifies the customer/purchaser, the customer/purchaser pay for the land and the constructed building to the Society/NTA and not to the builder.
Demand in respect of Real Estate Agent Service - Held that:- The definitions of Real Estate and Consultant would clearly show that the definition covers any service in relation to sale, purchase, leasing or renting of real estate. The Consultant covers a person who renders in any manner various types of activities which include all the activities undertaken by appellant in this case. We have to note that the words used are rendering any service in relation to Real Estate. In the case of Real Estate Consultant, it means rendering advice, consultancy etc. in any manner of Real Estate. Under the circumstances, any services rendered in relation to Real Estate and any advice or activity undertaking in relation to Real Estate for a service receiver would be covered under this category and unfortunately for the appellant the definition clearly cover them.
Demand in respect of Construction Service - works contract - date of levy - composition scheme - Held that:- In the case of commercial or industrial service also appellant’s claim is only that there is nobody in between the purchaser of a portion of the property or mall or commercial complex constructed by them and again the same ground has been explained. This contention cannot be accepted - entitlement to benefits of composition scheme arises only after exercise of option as per rules. For the period prior to 2007, no such option would be available for the services. Moreover, it was also submitted that it was a clear understanding of the legislature that many of the services which were included prior to works contract service which has come from 1-6-2007 were, in fact, covered under some other category of service especially relating to construction activity. Therefore, it can not be said that prior to 1-6-2007, the appellant was not liable to payment of Service Tax even if service was classifiable and liable to Service Tax earlier. - Decision of Nagarjuna Construction Co. Ltd. reported in [2010 (6) TMI 91 - ANDHRA PRADESH HIGH COURT] followed.
Appellants have not been able to make a prima facie case in their favour. Keeping in view the peculiar facts and circumstances of the case and the facts that no financial difficulties have been pleaded and the balance of convenience, etc. it is felt that the appellant should be directed to deposit an amount of Rs. 2 crore as pre-deposit for hearing the appeal. Taking the interest quantum also into account, but without taking penalty, the amount required to be deposited would come to less than 10% of the dues - stay granted partly.
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